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Free of charge: The Forgotten Workforce

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A joint research project of Monash University and Entity Solutions, this report looks at findings about the attitudes to the work of freelance consultants and those that engage them. The research has focused on face-face interviews with independent freelance consultants working in the IT industry and, a survey of the businesses that engage them. (PDF file, 14 pages, 300 KB).

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Unformated preview of the document: 'The Forgotten Workforce' (Part 2):

of contracting provides an even more
complex and challenging dimension to both the nature of work and workers. Within the academic
community, it is a challenge which mirrors calls from researchers such as Shamir (1992),
Feldman, Doerpinghaus, and Turnley (1994) to a Broschak and Davis-Blake (2006) to investigate
work beyond the borders of the organisation to better understand the lives of those who working
outside of these settings. Despite this, remarkably little seems to have been done. As Ashford et
al (2007:69) suggest it seems overdue that we begin to see those who have moved outside of the
organisational norms "as people take their careers into their own hands, construct their identities
as professional and entrepreneurial, and view organizations in an increasingly negative light."
This brief section provides a very broad brush overview of the larger academic perspective on
some of the key themes about contracting. There are however, important contextual features to
contacting – particularly that of independent contracting, in Australia and so we also provide a brief
background to these.
CONTRACTING IN AUSTRALIA: A BRIEF OVERVIEW
Many of the key benefits organisations derive from the use of non-standard workers arise from the
fact that they fall outside of the normally accepted provisions and protections associated with
employment (ACIRRT 2005; Burgess and Campbell 1998). Following on from this, the ability to
differentiate between employee and contractor has been contentious within both Australian State
and Commonwealth jurisdictions for decades. Until recently, the debate focussed on establishing
independence within the employment relationship to separate employer, worker and contractor and
required the common law to provide guidance. While the key test dates back to 1880, defining the
master/servant relationship, focussing on the legal definition of control, modern technology and the
diversity and complexity of working arrangements means that this can be difficult to determine in
any consistent and rational manner (Stewart 2007). Legal response to the increasing complexity
4
saw increasingly complex tests of 'true' independence and the 'economic reality' of the relationship
emerge – concerns reflective of practices such as the reclassification of formerly permanent
workers to contract status (Hall 2006). Perhaps it is no wonder then that organisations engaging
contractors have generally focussed on managing the legal aspects of the contract rather than the
human side of the contractor?
Overall, the most active area of legislation in day-to-day dealings with contractors has been that of
taxation (Moran 2002; Underhill 2006). This is most clearly reflected in Australian Government
moves to clarify independent contractor arrangements in relation to taxation with the introduction of
the Alienation of Personal Services Income Act 2000 (PSI). This ensured those essentially in an
employment relationship continue under the Pay As You Go (PAYG) system, rather than as a
business and at a lesser rate with more access to deductions in the PAYG instalment system
(Moran 2002; Productivity Commission 2006). These moves represent a shift from the
employment relationship to the commercial nature of contracting - a move more fully recognised in
the Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006 (DEWR
2005). Phillips (2005) suggests that this legislation places Australia internationally at the cutting
edge as the key feature of the commercial contract is that of a contract of joint control - where each
party exercises equal legal rights to control the terms of the contract. Such 'cutting edge' claims
are supported in the vote taken at the International Labour Organisation (ILO) conference on 15
June 2006 effectively endorsing the status of independent contractors by declaring that
employment law should not interfere with commercial relationships (ICA 2006). This development
reverses previous ILO contentions that the definition of employee/independent contractor was
confusing and that the alleged existence of "dependent contractors" created justification for pulling
some independent contractors into employment regulations.
The refocus onto commercial rather than employment arrangements appears to mirror the reality of
the use of contractors in Australia - where it has been largely opportunistic and unplanned, reacting
to the need to meet unexpected peaks being common practice in both white-and blue-collar
sectors

Unformated preview of the document: 'The Forgotten Workforce':  Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9

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